Labor Day Sales Events Boost August U.S. Light-Vehicle Delivery Totals

Buyer and Dealership ManagerU.S. new light-vehicle sales in August were more robust than anticipated, mainly due to a heady retail sales finish over the Labor Day weekend. Retail sales even outperformed the accurate monthly forecast from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive, which already had projected one of the strongest sales months in six years.

There was an extra boost from holiday sales, especially on August 31 since Labor Day weekend was counted in August’s sales total as the month ended on a weekend. J.D. Power experts say they are not sure yet how much August sales will pull forward from September results. Total consumer spending on new vehicles in August was the highest on record—reaching $38.5 billion,—mainly due to strong transaction prices and higher sales, according to J.D. Power analysis.

Retail sales in August climbed 17.7% above retail totals in the same month of 2012. The final week of August sales totals (August 26 – Sept. 3) captured nearly 35% of the month’s retail sales volume, according to Dave Cutting, senior manager of North American Forecasting at LMC Automotive. Retail deliveries totaled 1.34 million units and the seasonally adjusted selling pace (SAAR) of 13.8 million was the highest since 2006. Continue reading ›

Tata Motors: Remaining Competitive in India

Ammar Photo

Ammar Master

One of India’s major automakers, Tata Motors, is struggling in its home market as buyers are attracted to the competition’s products. Tata’s upgraded products lack excitement and the Nano’s current slump has brought up a question about the company’s ability to connect with young and aspiring consumers in India.

During the past few years, more competitors have been entering the critical sub‐compact car market, and Tata may have over-emphasized the importance of its Nano and the role of the model in the company’s portfolio.

Tata was riding high on expectations of a mass migration of India’s two‐wheeler buyers to the affordably priced Nano. When this did not happen, the Nano was in a position that failed to win buyers from stronger models such as the Maruti Suzuki Alto and Hyundai i10. Continue reading ›

Satisfaction with Auto Insurance Providers Dips in 2013


Jeremy Bowler

Customer satisfaction with auto insurance companies in the U.S. market declines by 10 points to 794 (on a 1,000-point scale) from a record high in 2012, according to our 2013 U.S. Auto Insurance Study, mainly due to a sharp increase in the number of customers who have experienced premium increases.

Although the study’s overall satisfaction average dips in 2013 vs. 2012, it is the second-highest index since the study launched in 2000. The major declines this year across all five factors measured in the study are with the price and policy factors—each declines by 13 points from 2012. These two measures contribute the most to lower overall satisfaction.

Premium Increases Climb by an Average of $40

In 2013, the dollar amount of premium increases averages $153, which is $40 higher than the average rate increase of $113 as reported in the 2012 study. We see that when there is an annual rate increase of $50 or less, only 9% of customers switch insurers. However, that nearly doubles to 18% when the rise is between $51 and $100, and it climbs to 32% when the increase is more than $200. Continue reading ›

China’s Automakers Eye India for Future Growth

Ammar Master

Ammar Master

The rapid emergence of India as a major automotive powerhouse coupled with the ambitions of China’s automakers to go global are the principal drivers behind the planned entry of China’s big automakers Beiqi Foton and Great Wall Motor.

Foton aims to become a key global player over the next decade, according to its 2020 Strategy statement. Under the truck maker’s “5+3+1” strategy, India is a key region in its growth plan along with Brazil, Mexico, Russia and Indonesia.

This is why Foton signed a Memorandum of Understanding (MoU) with the Maharashtra government in India last April to establish a manufacturing unit at an investment cost of $307 million over 5 years. It is currently in the process of setting up its plant in Chakan (near Pune) to build light-, medium- and heavy-duty commercial vehicles. Continue reading ›

Why do Shoppers Avoid Alternative Powertrain Vehicles?

More than one-third (36%) of new-vehicle shoppers avoid alternative powertrain vehicles—hybrid, plug-in hybrid or electric vehicles—mainly because of cost/price, according to our 2013 Avoider Study, which is based on responses from nearly 31,000 new-vehicle owners who registered their new car or light truck in May 2012.

The second-highest percentage of owners (25%) who avoid . . . Continue Reading Why do Shoppers Avoid Alternative Powertrain Vehicles?

Rental Car Customer Satisfaction Rises to Seven-Year High

Stuart Greif

Overall customer satisfaction with rental cars has risen to the highest level in seven years, according to our 2012 North America Rental Car Satisfaction Study, which is based on evaluations from more than 12,100 business and leisure/personal customers who rented a vehicle at an airport location during the year.* In fact, the overall satisfaction index averages 769 points (on a 1,000-point scale), which is up 11 points from 758 in 2011 and surpassing a recent record of 767 set in 2006.

Satisfaction with renting cars at airport locations improved across all six factors** measured in the study, with the greatest improvements from last year in two factors: shuttle bus/van and costs and fees.

Business customer satisfaction is up by 9 points, to 762 from 753 a year ago, while satisfaction among leisure/personal customers improves by 12 points to 774 in 2012.

We observe that the rental car industry is benefiting from higher satisfaction levels with cost and fees in relation to prior years. Yet, there are opportunities to leverage both human contact and technology to address customer pain points with the rental experience. Continue reading ›

Cross-Shopping Multiple Models Increases In India

Mohit Arora

More of India’s new-vehicle buyers are shopping around and looking at multiple vehicles during the car-buying process than ever before. This year, 28% of new-vehicle buyers in India considered one or more vehicles before making their ultimate purchase decision, which is up from just 23% in 2011, according to our 2012 India Escaped Shopper Study.

Repeat buyers tend to be driving this trend of cross-shopping. One-third of these buyers (those who are purchasing a second vehicle or replacing a household vehicle) considered one or more models during their shopping activity this year—up 9% from 2011. In contrast, first-time buyers tend to be more conservative and their cross-shopping rate remains largely unchanged from 2011 at 20%.

Our study also finds that repeat buyers are more involved in the shopping process and are more likely to visit a dealership and test drive new models before making their purchase decision. It appears evident that the increase in cross-shopping has also risen due to the launch of several new models and a wider range of vehicle choices in the market. Continue reading ›

Southeast Region Achieves Highest-Ranking Auto Insurance Satisfaction Scores

Customer satisfaction with auto insurance companies in the seven regions of the U.S. varies from the highest regional industry average of 814 (on a 1,000-point scale) in the Southeast region to a low of 784 in the Northeast region of the country, according to results of the J.D. Power and Associates 2012 U.S. Auto . . . Continue Reading Southeast Region Achieves Highest-Ranking Auto Insurance Satisfaction Scores

OEMs in India Plan to Invest in Popular Diesel Powertrains


Ammar Master

Vehicle makers have revived their plans to invest in diesel engine manufacturing facilities in India after the Indian government decided not to implement any additional tax on diesel-powered vehicles in the Union Budget 2012‐13 that was announced earlier this year. The decision to further invest in manufacturing is being driven by the strong demand for diesel-powered vehicles, which account for nearly half of all passenger vehicles sold in India, suggests Ammar Master, senior analyst, LMC Automotive*. Excerpts from a recent perspective in partnership with J.D. Power Asia Pacific on diesels in India:

“The main reason behind the strong demand for diesel-powered vehicles is the cheaper price of diesel at the pumps. In fact, the price gap between diesel and gasoline (petrol) has widened by as much as 40% since the government deregulated gasoline in June 2010.

As a result, the unexpected surge in demand for diesel vehicles caught India’s largest vehicle maker Maruti Suzuki off guard and the company lost sales. Continue reading ›

Ownership Satisfaction in Germany Differs among Groups of Buyers


Marcus Behrendt

It’s been 3 years since the German government eliminated scrappage program (2009) incentives to help encourage consumers in the German auto market to purchase new vehicles. In relation to the scrappage discount, we find that overall satisfaction among owners who purchased vehicles under the program is much lower than among owners who did not buy a vehicle through the discount program, according to the 2012 Germany Vehicle Ownership Satisfaction Study (VOSS), which J.D. Power conducts jointly with German auto magazine, AUTO TEST. *

In fact, satisfaction among the new-vehicle owners who accepted cash back for scrapping vehicles that were at least 9 years old is 30 index points lower than among those owners who did not receive a discount. It’s likely that the owners who traded in their older used vehicles may have had high expectations for their new vehicle and anticipated that the new vehicle would be perfect and that the dealership experience would be stellar. Also, consumers who took the discounts tend to be price sensitive and, according to J.D. Power research, that means they are likely to be very critical. Continue reading ›